Federal rules force customer rebates for Missouri's biggest health insurer

Centene subsidiary Ambetter from Home State Health failed to meet Affordable Care Act requirements for medical care spending. The refunds to Missourians will be more than all insurers paid out nationally rebates in 2023

BY: RUDI KELLER

Missouri Independent

Missouri's biggest individual insurer must rebate almost $90 million to policyholders because it spent too little on care and too much on administration.

Ambetter from Home State Health, a subsidiary of Clayton-based Centene Corporation, is mailing checks totaling $87.5 million to customers in Missouri because it violated the Medical Loss Ratio requirements of the Affordable Care Act. Letters dated Sept. 10 notifying policyholders of the rebates — equal to more than one month's premium for each — began arriving in mailboxes over the weekend.

One of Ambetter's competitors, United Healthcare, is also making rebates to Missouri customers. In a Sept. 5 news release, United Healthcare stated that it will rebate $192.2 million nationally for group market plans offered in 31 states and $167.1 million for individual insurance market plans offered in 19 states.

Missourians in both United Healthcare markets will be eligible for rebates but the material supplied by the company did not show the amounts.

The rebates from Ambetter are among the largest for individual insurance companies operating in the Missouri marketplace since the Affordable Care Act began requiring them in 2012. Over 12 years, insurers have rebated $587.1 million to Missouri policyholders, with the most being $192.7 million in 2019.

"This is a standard and required process under the Affordable Care Act that ensures health plans return a portion of premiums to members if spending on medical care falls below federal thresholds," a prepared statement from Centene stated.

Every year insurers must report their revenue from premiums and spending on health care and activities intended to improve care, such as smoking cessation or other programs. That is compared to the amount spent on administration.

The Centers for Medicare and Medicaid Services evaluates the reports and determines the rebate amounts. The data is examined on a three-year rolling basis and Ambetter's rebates are for the years 2022-2024.

During 2023, CMS directed companies to rebate $957 million nationally. A report summarizing rebates for 2024 is not yet available.

Each insurer must spend 80% of total premiums — and 85% of money from premium increases — on health care.

During that period, of premiums paid for individual policies, Ambetter told policyholders in the letter that it spent only 71.4% of the approximately $1 billion received in premiums in 2024. Ambetter must refund the 8.6% difference.

Ambetter is the largest individual insurance provider in the state, according to data from KFF, a health policy news and analysis organization. Ambetter covers about 46% of the 270,275 people buying individual plans. Elevance, formerly Anthem, is the second largest, with 28% of the market, followed by United Healthcare, with about 7%.

Along with the rebate checks, customers buying plans from Ambetter will likely see some of the smallest premium increases in the state in the coming year. According to an Aug. 1 news release from the Missouri Department of Commerce and Insurance, Ambetter is seeking an average premium increase of 1.9% starting Jan. 1.

Seven of the eight other companies offering plans in all or part of the state are proposing increases averaging from 4.6% to 29.2%. One, Blue Cross and Blue Shield of Kansas City, has said it will cut rates by an average of 4.2%.

"Missourians should expect to see premium increases for many of the individual market plans as well as changes to coverage areas and networks," the department said in the news release.

The final premium rates for all companies will be announced by Oct. 31.